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Brown v. Wells Fargo Bank, N.A.

United States District Court, E.D. California

December 19, 2019

WELLS FARGO BANK, N.A., et al. Defendants.



         This case concerns a foreclosure by Defendant Wells Fargo Bank of Plaintiff s home.[1](ECF Nos. 1-2, 13.) In her First Amended Complaint, Plaintiff initially attacked Wells Fargo's conduct in her underlying bankruptcy action. (See ECF No. 1-2.) The Court dismissed these claims with prejudice.[2] (ECF Nos. 10, 12.) However, the Court granted Plaintiff leave to amend her Homeowners Bill of Rights (“HBOR”) claim--that Defendant failed to establish a single point of contact as required by Cal. Civ. Code § 2923.7--because the Complaint failed to allege sufficient facts. (See ECF No. 10 at pp. 6-7.)

         Instead, however, Plaintiff submitted a Second Amended Complaint with four new claims, none of which concerned her “single point of contact” claim under the HBOR. (ECF No. 13.) Defendants now move to dismiss all claims in the Second Amended Complaint with prejudice for violating Federal Rule of Civil Procedure 15(a)(2). (ECF No. 14.) Plaintiff opposes, and has moved for a preliminary injunction to stop certain eviction procedures. (ECF Nos. 16, 20.)

         I. Plaintiff has abandoned her original HBOR claim, so leave to amend should be withdrawn.

         As an initial matter, the Court notes that Plaintiff was only granted leave to amend her HBOR claim against Wells Fargo concerning the “failure to establish a single point of contact, ” as alleged in the First Amended Complaint. (ECF No. 1-2.) In the Court's prior findings and recommendations, the undersigned informed Plaintiff that if she wished to amend this claim, she needed to present facts to indicate that she requested a single point of contact and that Wells Fargo's failure to establish the service led to the trustee sale. (ECF No. 10 at p. 7, citing Shupe v. Nationstar Mortgage LLC, 231 F.Supp.3d 597, 603 (E.D. Cal. 2017), and Jerviss v. Select Portfolio Servicing, Inc., 2015 WL 7572130, *6 (E.D. Cal. Nov. 25, 2015).) Plaintiff's Second Amended Complaint does assert an HBOR claim, but does so under a different section of that statute and with different facts--essentially stating a new claim. (See ECF No. 13.) Thus, Plaintiff has abandoned her original HBOR claim under Cal. Civ. Code § 2923.7, and leave to amend this claim should be withdrawn. See Brannigan v. Baughman, 2017 WL 3913909, at *5 (E.D. Cal. Sept. 7, 2017) (“Although Brannigan raised an ineffective assistance of counsel claim in his initial petition, that claim solely related to counsel's failure to call certain witnesses at trial, which was abandoned in the amended petition.”); U.S. v. Sekhon, 2017 WL 6507247, at *5 (E.D. Cal. Dec. 20, 2017) (same result); see also Lacey v. Maricopa Cty., 693 F.3d 896, 928 (9th Cir. 2012) (“[W]e will consider [dismissed] claims to be waived if not [repleaded].”).

         II. Plaintiff's Second Amended Complaint, asserting four new claims, should be treated as a request to amend--which should be denied.

         Instead of complying with the Court's instructions in the first Findings and Recommendations (ECF No. 10) regarding amendment, Plaintiff filed a Second Amended Complaint that asserted four new claims against Wells Fargo. (ECF No. 13.) Given Plaintiff's pro se status, the Court construes her filing as a motion to amend her complaint, reviewable under Federal Rule of Civil Procedure 15(a)(2).

         Legal Standard

         The Federal Rules of Civil Procedure provide that, following a first amended pleading, “a party may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Leave to amend “shall be freely given when justice so requires.” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006). However, leave to amend may be denied when any of the following factors are at play: (1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether there has been previous amendment. Id.; see also Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the above factors to be considered when deciding whether to grant leave to amend, and reminding that “the consideration of prejudice to the opposing party . . . carries the greatest weight.”).

         A plaintiff's proposed amendments are futile if the amended complaint would be subject to dismissal. Californians for Renewable Energy v. California Pub. Utilities Comm'n, 922 F.3d 929, 935 (9th Cir. 2019). “The test for futility is identical to the one used when considering the sufficiency of a pleading challenged under Rule 12(b)(6) of the Federal Rules of Civil Procedure.” Karol v. Med-Trans, 2012 WL 3862148, at *4 (E.D. Cal. Sept. 5, 2012) (citing Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988)). Therefore, “a proposed amendment is futile only if no set of facts can be proved under the amendment to the pleading that would constitute a valid and sufficient claim.” Id; see also ECF No. 10 at pp. 4-5 (citing the standards for notice pleading under Rule 8, the standards for dismissal under Rule 12(b)(6), interpreting pro se pleadings, and the Ninth Circuit's standards for granting leave to amend).


         For the reasons stated below, the Court finds that Plaintiffs proposed amendments to her pleadings should be denied. The Court has reviewed each of the claims under Rule 12(b)(6) and finds they would be subject to dismissal--thus, futile.

         Plaintiffs “Breach of Contract” claim alleges Wells Fargo failed to notify her that she could have “cure[d] the default and avoid[ed] acceleration and foreclosure by accepting a mortgage modification.” (ECF No. 13 at ¶ 63.) Plaintiff asserts that Wells Fargo was “required to offer her a mortgage modification but failed to do so.” (Id.) Plaintiff has not, however, asserted the contractual language on which she bases her claim, leaving her allegation conclusory at best. Frontier Contracting, Inc. v. Allen Engineering Contractor, Inc., 2012 WL 1601659, at *4 (E.D. Cal. May 7, 2012) (“A written contract may be pleaded either by its terms - set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference - or by its legal effect. In order to plead a contract by its legal effect, plaintiff must allege the substance of its relevant terms.”) (citing McKell v. Washington Mutual, Inc., 142 Cal.App.4th 1457, 1489 (2006)). In fact, the bulk of Plaintiff s opening allegations (ECF No. 13 at ¶¶ 20-58) concern Wells Fargo's actions in relation to the Home Affordable Modification Program (“HAMP”), which does not provide a remedy under breach of contract. See, e.g., Escobedo v. Countrywide Home Loans, Inc., 2009 WL 4981618, at *3 (S.D. Cal. Dec. 15, 2009) (finding a lack of standing to bring a breach of contract claim related to HAMP because nowhere is it required that the lender institute unilateral modifications); see also, e.g., Villa v. Wells Fargo Bank, N.A., 2010 WL 935680, at *3 (S.D. Cal. Mar. 15, 2010) (finding Escobedo as persuasive because “the HAMP agreement did not require loan servicers to modify eligible loans; thus, the court found borrowers lacked standing to enforce the agreement.”).

         Plaintiffs Claim II for “Wrongful Foreclosure” would also fail under Rule 12(b)(6). The core of her allegation is, again, that Wells Fargo was required to notify her of her right to modify before accelerating and foreclosing. However, these conclusory allegations do not support a wrongful foreclosure claim, which requires (1) an illegal, fraudulent, or willfully oppressive sale of the home; (2) harm to the Plaintiff; and (3) full tender (unless excused). See In re Mortg. Elec. Registration Sys., Inc., 754 F.3d 772, 784 (9th Cir. 2014). Plaintiff asserts she was excused from tendering because of Wells Fargo's averred duty to notify her of her options under HAMP. (ECF No. 13 at ¶ 68). However, excuses from California's tender requirement are: (1) the underlying debt is void; (2) the foreclosure sale or trustee's deed is void on its face; (3) a counterclaim offsets the amount due; (4) specific circumstances make it inequitable to enforce the debt against the party challenging the sale; or (5) the foreclosure sale has not yet occurred. Id (citing Chavez v. Indymac Mortg. Servs., 219 Cal.App.4th 1052 (2013)). As discussed above, Plaintiff has no such guarantee under HAMP, so these tender ...

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